New report says it was the busiest August in five years as prices rose more than 12 percent from the year before

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Jeremy and Megan Brotherton hang out with their son Cooper, six months, outside their home in the Gale Ranch neighborhood of San Ramon, Calif., on Tuesday, Sept. 19, 2017. The couple sold their home and are cashing out from the Bay Area and moving to Colorado in mid-October. (Jane Tyska/Bay Area News Group)

Despite the meager supply of single-family homes on the market, Bay Area home sales rose in August as buyers rushed to grab almost anything available. In fact, it was the busiest August in five years as prices continued to climb from a year earlier — by more than 12 percent.

The median price of a single-family home in the nine-county region was $775,000, according to the CoreLogic real estate information service, which issued its latest report Friday.

It contains some striking data about the current market and its inherent affordability issues. The Bay Area showed a 4.4 percent year-over-year increase in sales of single-family homes, and buyers shifted toward more expensive houses – perhaps an unavoidable swing as prices keep tilting upward.

“A 7.7 percent gain in (the number of) deals for homes costing more than $500,000 compensated for a 21 percent drop in sales below $500,000,” said Andrew LePage, research analyst for CoreLogic. That’s because far more Bay Area home sales — 74.5 percent of total single-family home sales — were for $500,000 or higher.

“Stuff under half a million is drying up,” he remarked. “The same kinds of houses are selling, but just for more.”

With buyers hell-bent on securing properties, they tore through the scant home supply and drove up prices yet again. The region’s 12.3 percent year-over-year price increase was the highest for any month since January 2014, when the median price rose 14 percent.

And while many homeowners are choosing to sit pretty – growing old in their houses while thinking about all that equity – some are cashing out to take advantage of current prices.

“The cost of living has always been a bit of a shock here,” said Megan Brotherton, a native Iowan who has lived in the Bay Area for 11 years with her husband Jeremy. They just sold their 2,600-square-foot house in San Ramon for about $1.1 million and are moving to Denver, where Jeremy, who works in computer security, has been transferred. The couple, who have a 6-month-old son, will live there in a 5,400-square-foot house on a third of an acre.

It cost $650,000.

“Denver is a lot of what we liked about the Bay Area – all the outdoors activities,” said Megan, who works in systems management, “but at a much lower cost of living. We kind of get the best of both worlds there.”

Still, most Bay Area homeowners won’t pull the plug.

“There is nothing out there, and I mean nothing,” said Kevin Swartz, a Saratoga-based agent with the Sereno Group. On average, he said, there were 786 active listings for single-family homes in Santa Clara County in August – down from 1,738 a year earlier.

In 2017, Swartz said, “It’s been trending down since May. We’ve been dropping something like 200 homes every month. I wouldn’t be shocked if there were less than 500 homes at the end of the year, and that is incredible.”

Just as incredible is the current sales growth in the county.

As the stock market has soared this year, many buyers — armed with NASDAQ earnings, income from stock-vesting programs and healthy salaries in the tech industry — are snapping up whatever is available, said Chris Trapani, CEO of the Sereno Group. A single-family house in Santa Clara County spent an average of 18 days on the market in August 2017 – compared to 29 days in August 2016. Countywide sales were up 15.8 percent year-over-year in August, making for the busiest August in five years.

The region’s “severe mismatch between housing supply and demand,” as LePage put it, pushed the median sales price for a single-family home in Santa Clara County to $1,054,000, up 14.6 percent year-over-year, and to $1,264,000 in San Mateo County, up 7.6 percent. Across the bay, the median was $810,000 in Alameda County, up 12.5 percent, and $580,000 in Contra Costa County, up 13.7 percent.

Jim and Lisa Suth are photographed inside their home on South Dublin Ranch Drive in Dublin, Calif., on Tuesday, Sept. 19, 2017. The couple are selling their home and moving a few exits down the freeway to Livermore. (Jane Tyska/Bay Area News Group)

Looking at sales of all homes – single family, condominiums and townhouses – LePage described the shift of buyers toward higher-priced properties.

In August 2016, 46 percent of homes sold in Santa Clara County went for less than $800,000; in August 2017, only 36 percent of home sales were for less than $800,000.

Likewise, in August 2016, 15.4 percent of sales in the county were for less than $500,000; in August 2017, only 10.6 percent of sales were for $500,000 or less.

“Somewhere around 1 in 10 homes is selling for under $500,000 in Santa Clara County – meaning nine out of 10 are selling for more,” Le Page said.

Even in Contra Costa County – among the most affordable in the region – the market mix is shifting toward more expensive houses. In August 2016, 48.2 percent of home sales there were for $500,000 or less; in August 2017, only 37.8 percent came in under $500,000. Drop the ceiling to $400,000 and the numbers are even more telling: 29.9 percent fell under that threshold in August 2016, only 19.7 percent this August.

Keller Williams agent Kevin Kieffer, who represented the Brothertons in their San Ramon sale, recently found a new home for his own family in Walnut Creek. He bought a 1,500-square-foot house – which he plans to remodel and expand to 2,700 square feet – for $1.5 million: “Because it’s two blocks from the BART station in a good school district,” he explained. “I know I want that convenience and I’m going to be there for 20 years and I want that property. You just pay up to get it.”

Jim and Lisa Suth decided to scale down and cash out.

In 2001, they bought their 3,500-square-foot house in Dublin for $800,400. Now that their two daughters are grown, they don’t need the space — or the stairs to the second floor. “I’ve got two metal knees,” explained Jim, a regional sales trainer for D.R. Horton, the home construction company.

They sold the house for $1,335,000, about $35,000 over the listing price – and almost exactly $500,000 above the price for which they bought it 16 years ago. Bingo! Because a married couple may be eligible to exclude up to $500,000 in capital gains from the appreciation of their primary home, the Suths expect to be home-free when they file their taxes.

Meanwhile, they have bought a 1,600-square-foot condominium in Livermore for $799,000.

“It’s nice having a big backyard and a huge kitchen,” Jim Suth said. “But we kind of realized that we’ve been living in about 1,500 square feet of our big house here in Dublin. I go into a room and realize I haven’t been in it in three weeks – and I’m vacuuming it? It’s time to de-clutter and go.”

Richard Scheinin covers residential real estate for the Bay Area News Group. He has written for GQ and Rolling Stone and is the author of Field of Screams: The Dark Underside of America’s National Pastime (W.W. Norton), a history of baseball. During his 25-plus years based at The Mercury News, his work has been submitted for Pulitzer Prizes for reporting on religion, classical music and jazz. He shared in the Pulitzer Prize awarded to the Mercury News staff for coverage of the Loma Prieta earthquake. He has profiled hundreds of public figures, from Ike Turner to Tony La Russa.